Healthcare and politics is a volatile mixture, like a C4 and nitroglycerin cocktail primed to explode at the slightest touch. That being said, California Attorney General Kamala Harris last week put patients above politics, nailing the answer to the question of whether Prime Health should be allowed to acquire the Daughters of Charity health system.
The quandary was a classic political chess game. On one side was Daughters of Charity, a financially-troubled institution who paid millions each year to care for those who could not pay. On another side was Prime Healthcare, a company some have accused of being somewhat predatory in how it handles troubled hospitals once it buys them.
Then, there were the unions. The California Nurses Association backed the Prime deal, because it would protect many of the jobs held by their members, while the Service Employees International Union opposed the deal because of what they claimed was Prime's record of acquiring shaky institutions and then gutting salaries, pensions and cutting back on charity care for the needy. Swirling around all of the controversy were TV ads bought and aired by Daughters of Charity, using hyperbolic claims that if Prime were not allowed to acquire the hospital chain that people would die.
Why all the fuss? Because in the state of California, any acquisition of a not-for-profit company by a for-profit company requires the approval of the AG before it can happen. Sound like a tough spot? Well, let's not leave out the politics of the situation. Longtime Democratic Sen. Barbara Boxer is retiring in 2017, leaving a prime political post up for grabs, and Harris is one of a few names mentioned by pollsters as having a better than average shot of winning that election. However, winning a US Senate seat in California means you've got have the support of the labor unions, who were inconveniently split on the issue of the Prime deal. Politically, it was a no-win situation for Harris, who would arouse the ire of one of the unions, no matter what she decided.
Instead of worrying about the politics, Harris made the one choice no one expected from a politician: She chose the patients.
Harris announced last Friday that she would allow the merger of the two firms, under a number of conditions. First, Prime must provide charity care at "historic levels" and reproductive care "without restriction or limitation." Second, Prime must invest $150 million in capital improvements and assume pension obligations for all of Daughters of Charity's 17,000 active and retired employees. Prime must also maintain its Medi-Cal and Medicare certifications for the next decade. Prime didn't exactly choke on the terms, but you could tell the company was not happy by its statement after the announcement was made.
"The conditions imposed on this sale by the attorney general are extensive, and many are unprecedented," Prime said in the statement.
In the aftermath, the unions groused a bit, but they had to in order to cater to their bases. Prime is complaining, but they'll eat the terms, because they are too far down the road to tell their board that it was an unfair deal—mainly because it’s not an unfair deal. Harris not only lives to fight another day, but she also walks away with a win for the patients of California who never really had a spokesperson, lobbyist or TV ads to back them.
While everyone else was tending to their internal concerns, Harris stood alone and hammered out a deal that protected consumers. It's good to see.